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on Labour Economics |
| By: | Stanislav Rabinovich; Ronald Wolthoff |
| Abstract: | We theoretically study misallocation of labor in a heterogeneous-firm model with imperfectly directed search. Some workers can direct their search, while others are uninformed about the location of wage offers ex ante and are assigned to job openings randomly. The main result is that too many workers apply to high-productivity firms, relative to the social optimum. This occurs because too many firms take advantage of their market power, attracting only random searchers. Because it is the low-productivity firms that do so, this induces all the directed searchers to concentrate at the high-productivity firms, a ''flight-to-quality'' phenomenon. Improvements in information have ambiguous effects on worker allocation, wages, and worker utility. A minimum wage can increase employment and welfare by reallocating workers across firms. With an endogenous entry choice, policy design meets with a tradeoff in balancing the misallocation inefficiency and a standard entry externality. |
| Keywords: | Directed search; random search; labor markets; minimum wage; misallocation |
| JEL: | E24 D83 J64 |
| Date: | 2020–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-662&r=all |
| By: | Gianluca Orefice; Giovanni Peri |
| Abstract: | The process of matching between firms and workers is an important mechanism in determining the distribution of wages. In a labor market characterised by large dispersion of workers' productivity and worker-firm complementarity, high quality firms have strong incentives to screen for the quality of workers. This process will increase the positive quality association of firm-worker matches known as positive assortative matching (PAM). Immigration in a local labor market, by increasing the variance of workers abilities, may drive stronger PAM between firms and workers. Using French matched employer-employee (DADS) data over the period 1995-2005 we document that positive supply-driven changes of immigrant workers in a district increased the strength of PAM. We then show that this association is consistent with causality, is quantitatively significant, and is associated with higher average productivity and firm profits, but also with higher wage dispersion. We also show that the increased degree of positive assortative matching is mainly reached by high-productive firms "losing" lower quality workers and "attracting" higher quality workers. |
| Keywords: | Matching;Workers;Firms;Immigration;Productivity |
| JEL: | F16 J20 J61 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2020-04&r=all |
| By: | Céline Piton; François Rycx |
| Abstract: | This paper provides a comprehensive quantitative assessment of the employment performance of first- and second-generation immigrants in Belgium compared to that of natives. Using detailed quarterly data for the period 2008-2014, we find not only that first-generation immigrants face a substantial employment penalty (up to -36% points) vis-à-vis their native counterparts, but also that their descendants continue to face serious difficulties in accessing the labour market. The social elevator appears to be broken for descendants of two non-EU-born immigrants. Immigrant women are also found to be particularly affected. Among key drivers of access to employment, we find: i) education for the descendants of non-EU-born immigrants, and ii) proficiency in the host country language, citizenship acquisition, and (to a lesser extent) duration of residence for first-generation immigrants. Finally, estimates suggest that around a decade is needed for the employment gap between refugees and other foreign-born workers to be (largely) suppressed. |
| Keywords: | First- and second-generation immigrants; employment; moderating factors |
| JEL: | J15 J16 J21 J24 J61 |
| Date: | 2020–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/303396&r=all |
| By: | Müge Adalet McGowan; Alexander Hijzen; David Law; Andrea Salvatori; Patrizio Sicari; Stefan Thewissen |
| Abstract: | Job creation has lowered unemployment, but the Belgian labour market still faces many challenges. Employment rates remain low, reflecting barriers to finding a job such as low levels of skills and weak work incentives. In addition, the changing nature of work will require faster adaptation of workers. In order to address these challenges, this chapter presents a detailed analysis of policy priorities, drawing notably on insights from the OECD Jobs Strategy. One priority should be that each worker has access to lifelong training, with additional allowances targeted to disadvantaged workers. To improve transitions into work, the use of tools for the profiling of individualised risks should be extended. A better combination of income support and incentives could be achieved through reforming both unemployment and in-work benefits. Reforming some aspects of employment protection legislation, such as those related to collective dismissals, and the wage formation system, would boost flexibility.This Working Paper relates to the 2020 OECD Economic Survey of Belgium http://www.oecd.org/economy/belgium-econ omic-snapshot/. |
| Keywords: | employment, labour market policy, skills, unemployment insurance, work incentives |
| JEL: | J20 J30 J50 J60 |
| Date: | 2020–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1602-en&r=all |
| By: | Raquel Fonseca; Simon Lord; Simon C. Parker |
| Abstract: | This paper examines the work motivations and incentives of employees and self-employed workers near retirement age. We use a sample of Canadians 50 years and older taken from LISA, the Longitudinal and International Study of Adult. Results are as follows. Poverty is associated positively with the transition from employment to self-employment after 50. Optimism appears to explain in part why employees decide to do the switch. For respondents who were self-employed at least once between 50 and 64 years old, it appears that having had prior self-employment experience does not reduce significantly the probability of being poor after 65. |
| Keywords: | self-employment, elderly, retirement, Canada, poverty. |
| JEL: | E24 E32 J14 J20 L26 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:rsi:creeic:2003&r=all |
| By: | Emran, M. Shahe; Jiang, Hanchen; Shilpi, Forhad |
| Abstract: | We incorporate gender bias against girls in the family, the school and the labor market in a model of intergenerational persistence in schooling where parents self-finance children's education because of credit market imperfections. Parents may underestimate a girl's ability, expect lower returns, and assign lower weights to their welfare (``pure son preference''). The model delivers the widely-used linear conditional expectation function (CEF) under constant returns and separability, but generates an irrelevance theorem: parental bias does not affect relative mobility. With diminishing returns and complementarity, the CEF can be concave or convex, and gender bias affects both relative and absolute mobility. We test these predictions in India and China using data not subject to coresidency bias. The evidence rejects the linear CEF, both in rural and urban India, in favor of a concave relation. The girls face lower mobility irrespective of location in India when born to fathers with low schooling, but the gender gap closes when the fathers are college educated. In China, the CEF is convex for sons in urban areas, but linear in all other cases. The convexity for urban sons supports the complementarity hypothesis of Becker et al. (2018), and leads to gender divergence in relative mobility for the children of highly educated fathers. In urban China, and urban and rural India, the mechanisms are underestimation of ability of girls and unfavorable school environment. There is some evidence of pure son preference in rural India. The girls in rural China do not face bias in financial investment by parents, but they still face lower mobility when born to uneducated parents. Gender barriers in rural schools seem to be the primary mechanism, with no convincing evidence of parental bias. |
| Keywords: | Gender Bias, Intergenerational Mobility, Education, Becker-Tomes Model, Complementarity, Son Preference, India, China, Coresidency Bias |
| JEL: | I25 J62 O1 |
| Date: | 2020–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99131&r=all |
| By: | Poeschel, Friedrich |
| Abstract: | In many countries, policies on family reunification of migrants are under review. Rules have become more restrictive in a number of cases, with unknown consequences for integration. This paper investigates quantitatively how absence of the spouse affects migrants' integration outcomes, also in the long term. A theoretical model of migrants' investment behaviour predicts that migrants tend to focus on the short term rather than long-term wage growth, until the spouse arrives and the probability of staying increases. Using the American Community Survey, I estimate the effects from absence of the spouse and delays in the spouse’s arrival. An instrumental variable is used to isolate the causal effect of delays. The results indicate that migrants focus more on work when their spouse is absent and that delays significantly decrease their long-term wages, by around 2% per year of delay. |
| Keywords: | migration, family, spouse, integration, family separation, family reunification |
| JEL: | J12 J15 J61 |
| Date: | 2020–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98993&r=all |
| By: | Luis Monroy-Gomez-Franco (City University of New York); Roberto Velez-Grajales (Centro de Estudios Espinosa Yglesias) |
| Abstract: | Recent analysis at the national scale have concluded that there is a strong relationship between skin tones and social mobility in Mexico, where darker skin tones are associated with lower rates of relative upward intergenerational mobility than those observed for lighter skin tones. The present paper shows that this previous estimates are biased upwards as they fail to take into account the effects of regional differences in the distribution of skin tones. We correct for this factor by analyzing a new data set representative at the regional level. Our results suggest that although qualitatively the gap in mobility rates persist, the size of the gaps are smaller than previously reported and vary substantially across Mexican regions. In particular, we find that individuals with light skin tones face higher upward mobility rates and lower downward mobility rates than the rest of the Mexican population. |
| Keywords: | Skin tone; Social Mobility; Regions; Mexico. |
| JEL: | O1 J6 J1 I3 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-525&r=all |
| By: | Constant, Amelie F. (UNU-MERIT, and Woodrow Wilson School, Princeton University) |
| Abstract: | This chapter undertook the monumental task of providing a complete outlook about return, repeat, circular and onward migration by bringing together the perspectives of the host and the home country. In this endeavor, it reviewed and evaluated all theories about why people move, when they circulate, where they go, who are the people who migrate, who are the people who return, and how they change the economic and social structures in the home country. In the process, it revealed the new norm of joint decision-making by the family as a unit and underlined the importance of non-economic reasons for return. The chapter further provided a state-of-the-art literature review about empirical evidence regarding the disparate phenomena of return, circular and onward migration. It emphasized commonalities and compared differences in findings, while connecting them to the theories, policies and institutions. Return, repeat, and circular migrants are self-selected and extremely heterogeneous people and cannot conform under one theory or empirical study. Their de facto migration comportment can be understood by several different theories and, in the absence of good data, it can be explained by a variety of studies. The chapter ends with a critical conclusion and hope to inspire new avenues of research on the topic. |
| Keywords: | Migration, migrant return, circular migration, onward migration, international labor migration, public policy |
| JEL: | F22 J15 J18 J20 J61 O15 |
| Date: | 2020–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2020004&r=all |
| By: | Adserà, Alícia; Ferrer, Ana M.; Herranz, Virginia |
| Abstract: | We consider the job progression of immigrant women in five European countries: France, Italy, Spain, Sweden and the UK. We complement data from the European Labour Force Survey (2005-2015), with information about the skills contained in the jobs held by women, using data from the O*Net. In particular, we focus on analytical and strength skills in immigrant's jobs and compare them to those required by jobs held by similar native women. Even though immigrants experience upon arrival a gap in participation relative to the native born, they gradually increase participation during the first ten years spent in the country (approximately, 1% per year in Spain, Italy and the UK, and 2% and 4 % per year in France and Sweden respectively). Our results reveal significant differences across countries of origin as well as differences within countries over the period of analysis. Recent immigrant women show relatively large gaps in the analytical skill content of the jobs they held relative to native-born women across our host countries. Further, with the exception of immigrants to Spain, they also work jobs with higher requirements of strength than their native-born counterparts do. Although educated immigrants show a different pattern in most countries (included Spain). We find differences within countries over the period of analysis that may be consistent with the variation of incentives to move depending on the business cycle at arrival - particularly given the meager opportunities in many destination countries during aftermath of the recent great recession. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:18&r=all |
| By: | Faryna, Oleksandr; Pham, Tho; Talavera, Oleksandr; Tsapin, Andriy |
| Abstract: | This paper examines the relationship between labour market conditions and wage dynamics by exploiting a unique dataset of 0.8 million online job vacancies. We find a weak trade-off between aggregated national-level wage inflation and unemployment. This link becomes more evident when wage inflation is disaggregated at sectoral and occupational levels. Using exogenous variations in local market unemployment as the main identification strategy, a negative correlation between vacancy-level wage and unemployment is also established. The correlation magnitude, however, is different across regions and skill segments. Our findings suggest the importance of micro data’s unique dimensions in examining wage setting – unemployment relationship. |
| Keywords: | Phillips curve,wage curve,heterogeneity,micro data,online vacancies |
| JEL: | C55 E24 E31 E32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:503&r=all |
| By: | Zhengyang Bao; Andreas Leibbrandt |
| Abstract: | Workplace tournaments are one likely contributor to gender differences in labor market outcomes. Relative to men, women are often less eager to compete and thrive less under competitive pressure. We investigate a competitive workplace environment that may produce more gender-neutral outcomes: tournaments with safeguards. In our experiments, participants take part in a tournament with a real effort task and choose whether they want to have a complimentary safeguard that guarantees higher wages for the low-ranked. As expected, we find that women are more likely than men to obtain such a safeguard. However, obtaining a safeguard comes at a cost. On average, the safeguard causes lower performance, creates a gender wage gap, and over-proportionally disadvantages women. Thus, we provide novel evidence that easing women into tournaments can backfire. |
| Keywords: | workplace tournaments, gender differences, safeguard, experiment |
| JEL: | C92 J16 M52 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8147&r=all |
| By: | Lechthaler, Wolfgang; Ring, Patrick |
| Abstract: | How the provision of unemployment benefits affects employment and unemployment is a debated issue. In this paper, we aim at complementing theoretical and empirical contributions to this debate with a laboratory experiment: We simulate a job market with search effort and labor force participation decisions while varying the maximum length of unemployment benefit eligibility. Our results reveal two separable, opposing effects: Individuals within the labor force search with lower effort when unemployment benefits are extended. However, individuals are more likely to participate in the labor force and to actively search for a job. Concerning employment, the second effect dominates so that unemployment benefits raise employment. |
| Keywords: | Job Search,Employment,Labor Force Participation,Unemployment Insurance,Economic Recession,Laboratory,Experiment |
| JEL: | J21 J65 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2149&r=all |
| By: | Sascha O. Becker; Lukas Mergele; Ludger Woessmann |
| Abstract: | German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles. |
| Keywords: | political systems, communism, preferences, culture, Germany |
| JEL: | D72 H11 P26 P36 N44 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8164&r=all |
| By: | Budría, Santiago (Universidad Nebrija); Martínez de Ibarreta, Carlos (Universidad Pontificia Comillas) |
| Abstract: | This paper asks to what extent host language proficiency can insure immigrants against the risk of ending up in mismatched jobs. Using the 2003-2016 waves of the Household, Income and Labour Dynamics in Australia (HILDA), the paper discriminates between three forms of mismatch, overqualification, under-qualification and over-skilling. Host language proficiency is instrumented using Bleakley and Chin (Rev Econ Stat 86:481–496, 2004) strategy, which exploits the fact that younger children learn languages more easily than older ones. To differentiate between local average treatment effects (LATE) and average treatment effects (ATE), the paper considers two alternative models, 2SLS instrumental variables and biprobit. We find that treatment effects are heterogeneous. English language proficiency among immigrants in Australia reduces the probability of ending up in over-qualified jobs, by between 17.2 (LATE) and 36.7 (ATE) percentage points. The ATE of overs-skilling is also significant and about -8.9 percentage points. In contrast, language skills tend to raise the probability of being under-qualified at the job, by about 8.6 percentage points according to the ATE. Local effects of over-skilling and underqualification fail to be statistically significant, suggesting that host language proficiency may be innocuous for some workers. Overall, the results indicate that host language proficiency is a country-specific, valuable form of human capital. |
| Keywords: | over-qualification, under-qualification, over-skilling, host language proficiency, instrumental variables |
| JEL: | F22 J24 J61 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13030&r=all |
| By: | Fortuna Casoria; Arno Riedl; Peter Werner |
| Abstract: | This paper reviews experimental studies that investigate the effects of communication on be-havior in organizational settings. Two main classes of studies are identified: (a) studies on coordination and competition, which include experimental research that tests whether com-munication can help to overcome coordination failure within organizations, and (b) studies that analyze the role of communication in alleviating problems arising from information asym-metries at the workplace. The evidence from these studies indicates that communication is suited to improve efficient coordination within firms and to mitigate information problems in employer-employee relationships. In addition, studies are presented that focus on the interac- tion between communication and monetary incentive schemes in companies. |
| Keywords: | communication, organization, experiment, behavior |
| JEL: | C90 D82 D83 J53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8140&r=all |
| By: | Ranasinghe, Ashantha (University of Alberta, Department of Economics) |
| Abstract: | Extending a standard model for measuring misallocation, I find substantial differences to its extent across male and female establishments spanning over 75 low and middle income countries. In South American and South Asian countries female establishments face higher distortions on production, whereas in Eastern European countries male establishments face higher distortions. These differences are due to gender bias against females in South Asia in the range of 20 percent, and perhaps surprisingly, against males in Eastern Europe of a similar range. Importantly, gender bias against females is negatively related to economic development. A hypothetical policy that levels the playing field across gender has a larger impact on female establishment size and raises their market share in countries where females face higher distortions. |
| Keywords: | misallocation; gender; productivity; micro data |
| JEL: | J16 O10 O40 O50 |
| Date: | 2020–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2020_002&r=all |
| By: | Vera Barinova (RANEPA University); Sylvie Rochhia (Université Côte d'Azur, France; GREDEG CNRS); Stepan Zemtsov (RANEPA University) |
| Abstract: | In this work, we examine the factors and patterns of attracting highly skilled migrants by the Russian regions. Attracting such specialists is particularly relevant for large developing countries with territories actively losing qualified personnel, and, accordingly, opportunities for long-term development. The results of an econometric study show that there are a number of objective factors that are poorly modifiable but have a significant positive effect on staff recruitment: the demographic potential of neighbouring regions, the size of accessible markets, and the natural comfort of living. Adverse socio-economic conditions in the region, such as high unemployment, negatively affect the possibility of emigration. However, there are factors that the regional authorities and the federal government are able to influence in the medium term. One of the most important determinants remains the income of highly qualified specialists and the availability of housing. Highly qualified specialists also strive to move to regions with a high level of education and a good healthcare system. The creation of favourable conditions for entrepreneurship has a positive effect on attracting active migrants, providing opportunities for new firms' establishments. As recommendations for regional policy, in particular, attracting highly qualified specialists to the Russian rare-populated Far East, efforts are needed to develop rental housing and zero-interest mortgages, create high-performance jobs, especially in education, science and medicine, as well as general improvement of institutional conditions for conducting business. |
| Keywords: | Russian regions, migration, gravity model, market access, institutions, human development index, regional policy, high-tech sector |
| JEL: | P23 J61 P36 R23 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-07&r=all |
| By: | Burbano, Vanessa (Columbia Business School); Padilla, Nicolas (Columbia Business School); Meier, Stephan (Columbia University) |
| Abstract: | In an effort to better understand occupational segregation by gender, scholars have begun to examine gender differences in preferences for job characteristics. We contend that a critical job characteristic has been overlooked to date: meaning at work; and in particular, meaning at work induced by job mission. We provide empirical evidence of the importance of gender differences in preferences for meaning at work using mixed methods. First, we demonstrate the universality of gender differences in preferences for meaning at work using a cross-country survey covering individuals in 47 countries. We show that these differences become more pronounced with greater levels of education and economic development, suggesting that their importance is likely to increase over time. To address potential social desirability bias in responses about job preferences and to examine whether differences in preferences translate into differences in important behavioral outcomes, we next conduct a conjoint analysis of a cohort of MBA students at a top US university and track their behavior over two years. We show show that preferences for meaning at work, particularly meaning induced by job mission, explain gender differences in not only types of courses taken, but also job industry placement during and after the MBA, thus helping to explain the under-representation of females in higher-paying industries. Overall, this research establishes that men and women differ in their preferences for meaning at work, with important implications for our understanding of the drivers of occupational segregation and of the consequences of corporate mission and purpose. |
| Keywords: | job design, job preferences, gender segregation by occupation, mission, meaning at work |
| JEL: | D91 J16 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13053&r=all |
| By: | Marta Angelici; Paola Profeta |
| Abstract: | Does removing the constraints of time and place of work increase the utility of workers and firms? We design a randomized experiment on a sample of workers in a large Italian company: workers are randomly divided into a treated group that engages in flexible space and time job (which we call “smart-working”) one day per week for 9 months and a control group that continues to work traditionally. By comparing the treated and control workers, we find causal evidence that the flexibility of smart-working increases the productivity of workers and improves their well-being and work-life balance. We also observe that the effects are stronger for women and that there are no significant spillover effects within workers of a team. |
| Keywords: | randomized control trial, productivity, work-life balance, well-being |
| JEL: | J16 J22 J24 L20 M54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8165&r=all |
| By: | Bussolo, Maurizio (World Bank); Checchi, Daniele (University of Milan); Peragine, Vito (University of Bari) |
| Abstract: | The main goal of this paper is to document and analyze the long-term evolution of inequality of opportunity (IOp) in the four largest European economies (France, Germany, Great Britain and Italy). Relative IOp represents an important portion of total income inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs. For all the countries, relative IOp shows a stable or declining time trend. In addition to these descriptive findings, the paper proposes a theoretical framework identifying channels of transmission which may affect IOp. Using this framework, a decomposition focuses on the role of three variables: a) intergenerational persistence in educational attainment, b) return of education, and c) networking activity of parents. While the first two variables exhibit a declining trend in all countries, which as predicted by the model should produce a decline in IOp, the third one appears to be rising in some countries, counteracting the effects of the first two. |
| Keywords: | inequality of opportunity, decomposition methods, education mobility, returns to education, family networking |
| JEL: | D31 D63 E24 I24 J62 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13044&r=all |